Master Your Taxes: A Guide for Indian Content Creators

It’s tax season and like all other professionals, YouTubers, streamers, and social media influencers in India too are navigating the complex world of taxation as the financial year comes to an end. The taxation scenario for content creators who live off their online creations in India can seem daunting as it is a fairly new field. Knowing, understanding and complying with Indian tax laws is essential for legal compliance for creators. While there’s no shortage of information for video production, audio mixing, social media growth, and company incorporation,  most creators have a blind spot when it comes to financial matters.

If you are a creator who is earning money from your social media content online, these are a few things you should know.

Content Creators as Entrepreneurs

There’s no special tax rate for YouTubers or social media influencers in India. The income they earn falls under two main categories:

Profits and Gains from Business and Profession:

If your online activities are counted as a full-time business, you will be taxed for profits from this business. The income you earn gets taxed based on the current income tax slabs, ranging from 0% to 30%.

Income from Other Sources:

If your online activities are a side hustle, then the tax rate is a flat 20%.

Freebies, GST & Deductions

Freebies and Sponsorships

All the free products and sponsorships you get from brands as a creator, valued at more than Rs 20,000 fall under “perquisites” and attract a 10% Tax Deducted at Source (TDS). Typically, this TDS is cut by the brand before paying you.

Goods and Services Tax (GST)

If your annual turnover exceeds INR 20 lakh (or INR 10 lakh in special category states), you need to register for a GST number. As a registered influencer, your services (like sponsored posts or consultations) get taxed at 18%.

Deductions

By keeping regular and meticulous records of your income and expenses over the year, you can deduct legitimate business expenses like equipment, software subscriptions, and even travel costs related to your content creation. Filing your income tax returns on time to avoid penalties is of course a given!

Finance tips for creators

Cash inflows, such as sponsorship payments, should be into a known bank account that’s preferably business only.

Cash outflows, such as equipment or salaries, should be from a known bank account or credit card account that’s preferably business only.

Keep a track of third-party platforms that pay you money, for example e.g. YouTube. Enter details like date, amount, descriptions and deductions and net amount received into an excel sheet. This helps reconciliation at the end of the year.

All business expenses, spending incurred with the goal of earning a profit for the content business, should be tracked by category, amount, description and date.

Disclaimer: These are general guidelines to be followed by content creators, meant solely for informational purposes and should not be construed as professional tax advice. It is advisable to seek guidance from a certified tax advisor who can provide personalized assistance tailored to your individual circumstances.